Greece in Flame, Goldman Sachs' Gasoline Smell, and Fireworks in Times Square

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PROTESTS CONTINUE IN GREECE:
CONFRONTING GOLDMAN SACHS:
FIREWORKS OF TERROR
by Danny Schechter, News Dissector
Greece has become the new volcano in Europe–only it’s the people who are spewing anger and fury at the virtual takeover of the company by European and international financial institutions who are imposing “austerity” –ie cutbacks in services, layoffs and worse. Unlike Americans who can be conditioned to accept what the people on top dish out, Greece is a country where people are conscious, organized and have a long history of struggling for what they believe is right.
 
This does not mean that there weren’t and aren’t serious economic problems. It does mean that what was an economic problem has become a serious political one. The unions there see the imposed austerity program as a a declaration of war against the working and middle classes.

Said one worker quoted by the BBC: “This is a war on workers. We will answer with war.” It seems to be class struggle time. Others point to the role of Goldman Sachs and US rating agencies in setting the ground for this crisis.
 
[For complete article reference links and features, please see source here at the News Dissector's blog.]

The LA Times reports: 3 killed as rioters overrun streets of Greece.

Tens of thousands protest cutbacks that come with the massive international bailout of the debt-ridden nation. The national strike shutters historical sites, schools. ‘Everyone is furious,’ says a resident.

Just read this:

A 24-hour national strike morphed into the strongest – and most violent – show of defiance yet over the austerity plan as millions of workers walked off the job and thousands took to the streets to vent their anger against the government.

In Athens, at least 100,000 protesters stormed the sprawling grounds of parliament, jeering at politicians and chanting, “Thieves, thieves!”

Tempers flared when a group of workers in orange caps tried to break through a cordon of riot police. Authorities fired three rounds of pepper gas, but rather than retreat, the demonstrators retaliated, sparking a series of running streets battles that quickly engulfed the Greek capital in plumes of acrid smoke.

BBC reports: Flights have been grounded, many schools are closed and hospitals are operating an emergency-only service.

The prime minister, who wants to freeze pay, gather more taxes and reform pensions, insisted that the proposals would be fully implemented.

EU leaders will discuss Greece’s difficulties on Thursday amid concern the crisis could threaten the euro.

European finance ministers are also due to hold a teleconference on Wednesday to talk about the issue

In Our country, there is not so much populist rage on financial issues but there is an intense debate.

Economist Rick Wolff comments (Portside.org)

The political conflicts and street battles in Greece today foretell what is coming to many countries including the US. The struggles are basically over what the government spends on and who pays the taxes. In today’s class-divided societies, classes differ over what governments should do and who should pay the taxes. Governments in such societies often turn to
borrowing - which produces national debts - as ways to defer and postpone the political problems of resolving class struggles focused on the state. By borrowing, governments can immediately accommodate - at least partly - the different class demands for government spending while postponing the raising of taxes into the future (when they will need to be raised more, of course, to repay the amount borrowed plus interest).

Scott Schneider comments:

Indeed it’s a minor miracle that the poor and working classes of Europe have thus far taken the staggering class warfare waged against them with so little violence. Worse is the total passivity which thus far has met the depravity and theft of trillions (directly costing thousands of lives through bankruptcies, dispossesion, homelessness, street crime, domestic violence, family break-ups, utility co. heating shut-offs leading to deadly fires, interruptions of critical medical treatment, suicides etc.) perpetrated upon helpless Americans - with no end in sight.

Something to consider.

Now back to the USA where financial reforms are quietly being cut back and compromised.

Fed Audit Endangered?

The Campaign for America’s Future reports: “First it was derivatives, now it’s auditing the Fed that Dems are looking to ditch on the financial reform bill. But Matt Yglesias doesn’t see it happening: “I find it very hard to imagine the Obama administration vetoing its own financial regulation bill over a popular, populist measure. Presumably that’s why they’re trying to kill it in the Senate.

Paradoxically, though, the harder Obama struggles against this idea, the more incentive conservative Republicans with no intention of voting yes on the bill have to vote with Sanders. That way, the whole package might fall apart in the Senate and nothing whatsoever will pass. This is pie-in-the-sky, but I think that if Congress wants to get serious about supervising the Fed better what they ought to do is scrap the ‘dual mandate’ in favor of something clearer. The nature of the dual mandate is that it’s impossible to say if the Fed is meeting its mandate, and thus impossible to hold anyone accountable. As an alternative, Congress could set a statutory nominal GDP trend target or a price level trend target and hold the leadership of the Fed accountable based on how good a job they do of hitting the target.”

GOING AFTER RATINGS AGENCIES

Senate Democrats are targeting the rating agencies with new amendments to financial reform: “Sen. Al Franken has written an amendment to financial overhaul legislation that would seek to prevent securities underwriters from hiring rating agencies based on which ones proved most willing to give their deals the highest possible ratings. Senators Bill Nelson, D-Fla., and Charles Schumer, D-N.Y., have agreed to cosponsor the amendment, according to a spokesman for Franken. The amendment is expected to be formally introduced later this week. Meanwhile, Nelson is also preparing his own possible amendment that would seek to hold rating agencies more accountable once their ratings, akin to Good Housekeeping seals of approval, are handed out. Currently, agencies continue to monitor credit ratings only if they are paid to do so. Nelson’s proposal would mandate ongoing surveillance.

Simon Johnson, BaselineScenario.com: Fake Debate: The Senate Will Not Vote On Big Banks

There is widespread agreement that the financial crisis which broke out in September 2008 was our most severe in over 50 years. There is also a consensus that, whatever other factors may have been involved, the excessive risk-taking and general mismanagement of huge banks at the center of our economy played a significant role in what happened. (Yes, of course the largest banks themselves deny any responsibility – including most recently using insulting language.)

The financial reform package now on the Senate floor puts surprisingly little constraint on the activities of our largest banks going forward – preferring instead to defer to regulators to tweak the rules down the road (despite the fact that this approach has gone badly over the past 20-30 years).

A growing number of senators insist we should do more to reduce the size and limit the leverage of megabanks (i.e., the amount that banks can borrow), arguing that this would constitute an important additional failsafe – on top of all other efforts to establish “more effective regulation”.

Senator Ted Kaufman (D, DE) has led the charge on this issue, pounding away for months – and giving another powerful speech on the floor of the Senate yesterday.

The Senate Judiciary Committee’s Subcommittee on Crime and Drugs held a hearing yesterday with an interesting title: “Wall Street Fraud and Fiduciary Duties: Can Jail Time Serve as an Adequate Deterrent for Willful Violations?” Subcommittee chair Arlen Specter said that he has “long believed that it is insufficient to have fines for fraud.” In his view, “[f]or corporate fraud, if you have a fine it is calculated as part of doing business.” Look for Senator Specter, who is running for re-election this year, to seek to add new crimes for financial fraud to federal law. Financialfraidlaw.com

Yet, astonishingly, it seems increasingly likely there will be no real Senate debate on this issue.

STEALTH BAILOUT STILL UNDERWAY

The Real Economy Project of the Center for Media and Democracy (CMD) updates on a monthly basis our Total Wall Street Bailout Cost Table that unlike other bailout assessments, includes Federal Reserve loans. CMD finds that the Federal Reserve, the U.S. Treasury and FDIC combined have disbursed a total of $4.7 trillion on the bailout of which $2 trillion is still outstanding.

CMD’s assessment also shows that the Federal Reserve and the U.S. Treasury have disbursed $1.6 trillion in an effort to prop up the mortgage investment market through purchases of mortgage-backed securities and Fannie Mae and Freddie Mac debt.

“Our Wall Street Bailout accounting illustrates that a stealth bailout it still underway as the Federal Reserve and the Treasury Department disburse funds to prop up the housing market. The majority of this money is from the Fed and was not subject to Congressional debate or approval. This activity underscores the need for a full and public audit of the Federal Reserve and all of its programs,” said Mary Bottari, Director of the Real Economy Project.

GIMME, GIMME

And now Fannie Mae is asking for another $10 BILLION from the government, a clear sign that the attempt to fix the housing market is NOT working. This GSE (Government Supported Enterprise) lost $8 in the last quarter. In all Freddie and Fannie have received more than $60 billion in bailouts with apparently no end in sight.

RICHARD ESKOW: The Senate Should Debate “Too Big to Fail” On Live Television

Now that the ideological defense of Wall Street behavior has collapsed, brought down by the wreckage of deregulation, bankers and lobbyists are pursuing a new strategy: fighting the democratic process itself. They’re suggesting that this issue is a little too complicated for public scrutiny, and that what’s really needed is for wiser heads to sort things out in private. We’ve seen what happens when deals are made in the back room. What we really need is the opposite: A live, televised debate before the American people.

There are still protests underway against Goldman Sachs. Here’s one:

Release: GOLDMAN SACHS FACES THE MUSIC: FIVE MAJOR SHAREHOLDER RESOLUTIONS FROM RELIGIOUS, SOCIALLY RESPONSIBLE INVESTORS REFLECT MAIN STREET VALUES AMIDST CONCERNS ABOUT WALL STREET ABUSES

Anticipating Goldman SEC Fraud Probe, Faith-based Investors Raised Concerns Months Ago About Company Practices By Filing Resolutions on Derivatives, Pay Disparity, and Other Issues.

When the management of Goldman Sachs meets Friday (May 7th) with its shareholders, it will face five major proxy resolutions filed by a delegation of over 12 members of the Interfaith Center for Corporate Responsibility (ICCR). The broad range of concerns reflected in these resolutions from religious and other socially responsible institutional shareholders will send a stark message to Wall Street regarding abuses that are very far removed from “Main Street values”.

The five key resolutions and their filers are:

1) Collateral in derivatives trading – Cathy Rowan for Maryknoll Sisters – A resolution that already received 30 percent support at Citigroup and 39 percent shareholder backing at Bank of America;

2) Pay disparity – Laura Shaffer for Nathan Cummings Foundation and Sr Judy Byron for Benedictine Sisters of Mt. Angel – A resolution requesting a review of internal pay disparity and the appropriateness of executive compensation levels;

3) Separation of CEO and chair – A resolution requesting that the Chair of the Board of Directors be an independent member of the board. Julie Tanner for Christian Brothers Investment Services and The Needmor Fund;

4) Political contributions – A resolution requesting that management provide a semi-annual report disclosing monetary and non-monetary political contributions and expenditures. Adam Kanzer for Domini Social Investments.

5) Executive compensation (Withdrawn) – Tim Smith, Senior Vice President, Walden Asset Management.

Two resolutions dealing with executive pay were withdrawn: One asked for the implementation of an annual advisory vote on executive pay as a platform for input from investors. As the company agreed to implement “say on pay” and put a resolution in the proxy, the resolution was pulled. A second resolution asked for independent input on executive compensation policies and practices and, as management took steps to address the issue, the resolution was withdrawn.

Pam Martens: Why A Criminal Case Against Goldman Matters and Could Stick

Michael Wolf, Newswer.com, Can Warren Buffett (and Andrew Ross Sorkin) Save Goldman Sachs?

Business reporters love successful people. One reason more scrutiny was not brought to bear on financial institutions during the boom years by more reporters is that financial institutions are (or were) run by successful people. You can’t argue with success. Of course there are fewer successful people today. Even people who still have a lot of money, like partners at Goldman Sachs, now find themselves in an equivocal position. They have diminished reputations, which means they have diminished power, which could mean they will have diminished fortunes (although that hasn’t happened…  

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